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Bankruptcy Threshold Adjustment Act of 2026
S. 3977 To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.
Summary
This bill would raise the debt thresholds for bankruptcy eligibility. For small business bankruptcies, the debt limit would increase to $7,500,000 for businesses engaged in commercial or business activities. For consumer Chapter 13 bankruptcies, the debt limit would increase to $2,750,000 for individuals or couples with regular income. The changes would apply to bankruptcy cases filed after the bill is enacted. The bill excludes certain entities such as SEC-reporting corporations and single-asset real estate businesses from the small business provisions.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Sen. Grassley, Chuck [R-IA] (R-IA)
5 cosponsors
Actions (3)
- Mar 4, 2026 Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 347. · senate
- Mar 3, 2026 Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time. · senate
- Mar 3, 2026 Introduced in Senate
Similar bills (6)
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Full text
IN THE SENATE OF THE UNITED STATES
March 3, 2026
Mr. Grassley (for himself, Mr. Durbin, Mr. Cornyn, Mr. Whitehouse, Mr. Graham, and Mr. Coons) introduced the following bill; which was read the first time
March 4, 2026
Read the second time and placed on the calendar
A BILL
To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Bankruptcy Threshold Adjustment Act of 2026”.
SEC. 2. DEBT LIMIT MODIFICATIONS.
(a) Modification to the Small Business Bankruptcy Debt Limit.— Section 1182(1) of title 11, United States Code, is amended to read as follows:
“(1) Debtor.—The term ‘debtor’—
“(A) subject to subparagraph (B), means a person engaged in commercial or business activities (including any affiliate of such person that is also a debtor under this title and excluding a person whose primary activity is the business of owning single asset real estate) that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not more than $7,500,000 (excluding debts owed to 1 or more affiliates or insiders) not less than 50 percent of which arose from the commercial or business activities of the debtor; and
“(B) does not include—
“(i) any member of a group of affiliated debtors under this title that has aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $7,500,000 (excluding debt owed to 1 or more affiliates or insiders);
“(ii) any debtor that is a corporation subject to the reporting requirements under section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)); or
“(iii) any debtor that is an affiliate of a corporation described in clause (ii).”.
(b) Modification to the Consumer Bankruptcy Debt Limit.—Section 109 of title 11, United States Code is amended by striking subsection
(e) and inserting the following:
“(e) Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 may be a debtor under chapter 13 of this title.”.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall apply to any case that is commenced under title 11, United States Code, on or after the date of enactment of this Act. Calendar No. 347
119th CONGRESS
2d Session
S. 3977
A BILL
To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.
March 4, 2026
Read the second time and placed on the calendar
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